Much-needed updates to financial management have changed the way we do business. In today’s business environment, companies are facing severe risks, responsibilities, and challenges. Global business integration plus new technological advancement in the financial sector has changed the way we do business.
Strategic and financial expertise
Recent corporate scandals have placed finance, particularly transparency, under scrutiny. The position of Chief Financial Officer (CFO) has become more prominent as businesses continue to rely more on the strategic and financial expertise. Therefore, financial officers are responsible for informing the business on its past, how to manage the present and to create a roadmap for the future. CFOs have become more integral in adopting new approaches to finance.
Technology in business
As businesses try to mitigate new risks, companies are increasingly reliant on financial technology to help them thrive in the modern environment. The focus has shifted to artificial intelligence, Enterprise Resource Planning software (ERP) like Microsoft Dynamics AX support businesses to evaluate the performance of their business in real time by accessing market data. The ERP integrates all functions of the organization.
The emerging trends in recent years have forced finance and those who manage it to be involved in every aspect of a business. Finance managers are no longer confined to their counters. They are now present in the boardrooms where significant decisions are made. The influence of finance continues to expand in business by helping businesses to drive corporate strategy, drive performance, and better assess and manage risks.
Technology costs and Technology needs
The financial management sector has become more intertwined with technology as new practices and systems are integrated into a business’s IT department. Their understanding of every aspect of the business operation has made them vital in the adoption of IT technology. A Chief Financial Officer may not know how to program or write code, but their involvement in virtually every business operation makes them vital in shaping business technology. Moreover, technology has become a financial concern and a costly asset. Chief financial officers know how to balance technology costs and technology needs if they want to keep a business agile and on the cutting edge.
Expanding roles of financial officers
The prominent role CFO has taken over in many businesses is because of the decline of COO – Chief Operating Officer. The duties of COO have been taken up by the CEO and CFO. Depending on the CEO’s experience, roles are shared according to strengths. For instance, the CEO may take up manufacturing and supply while the CFO may take up procurement and technology.
The financial functions in businesses have diversified the way companies are structured and run. The ability of the finance chiefs to offer critical, objective, systematic view on business operation has made them indispensable.